For the second consecutive year, CDSPI’s Family of Funds ranked #1 in investment performance based on data from Morningstar Direct. Writing in Investment Executive, Catherine Harris highlights CDSPI’s standout results in her article, Best Seg Funds of 2024 Leaned on Magnificent Seven. She notes that: “CDSPI had the best investment performance — 88.9% of its AUM [assets under management] were in funds ranked in the first or second quartile by Morningstar Direct. It was the second year that the small dental not-for-profit (with $797.7 million in AUM) was at the top, by a wide margin.”
According to Ms. Harris, CDSPI Funds “…are all externally managed. Among the 39 seg funds, 31 had above-average returns, with CDSPI Corporate Bond CI Fund, managed by CI Investments, and Global Real Estate Fund, managed by Invesco, posting the highest returns in their categories.”
Steven Moscone, Vice President of Advisory Services at CDSPI Advisory Services believes that topping the list in consecutive years is an impressive achievement for the organization. “This speaks to strong fund management and strategic investment decisions. Our ability to maintain this success for a second year highlights our commitment to delivering value to our clients.”
What are Morningstar Ratings?
Morningstar Ratings evaluate the strength of a fund based on past performance, risk-adjusted returns and fund expenses. These ratings, represented by a scale of stars ranging from one to five, offer investors a snapshot assessment of a fund's performance relative to its peers within the same category. A five-star rating indicates a fund has performed well compared to similar funds over the long term.
HOW TO USE MORNINGSTAR RATINGS
Morningstar ratings play a role in investment decision-making for several reasons:
Performance Comparison:
They allow investors to quickly compare a fund's performance against its peers, providing insights into its relative strength or weakness.
Risk Evaluation:
Morningstar ratings consider risk-adjusted returns, helping investors assess a fund's ability to generate returns while managing risk. This assists in aligning investments with risk tolerance and objectives.
Expense Analysis:
By factoring in fund expenses, Morningstar ratings enable investors to evaluate whether a fund's performance justifies its cost, ultimately impacting long-term returns.
Decision Making:
Morningstar ratings offer a simplified method for investors to narrow down their choices and identify funds worthy of further consideration, particularly amidst a vast array of investment options.
Other Approaches to Assessing Fund Performance
Morningstar acknowledges its rating system is a quantitative measure of a fund's past performance that is not intended to accurately predict future performance. Before investing, investors should conduct thorough due diligence. This may include analyzing a fund's investment strategy, manager tenure, and portfolio composition to ensure alignment with objectives.
Investors, with the help of an Investment Advisor, can also consider alternative methods for evaluating fund performance and philosophy:
Peer Group Comparison:
Comparing a fund's performance against its peers within the same category offers additional context and helps investors assess whether performance is truly exceptional or standard within the industry.
Fund Philosophy and Objectives:
Understanding a fund's investment philosophy and objectives is crucial. Investors should ensure alignment with their own goals, considering factors beyond just ratings.
Independent Research:
Supplementing Morningstar Ratings with independent research from reputable sources aids in gaining a comprehensive understanding. This may include analyzing historical performance data and expert analysis.
“Morningstar ratings are just one tool we use when navigating the complexities of investment choices,” says Shan Janmohamed, an Investment Advisor with CDSPI Advisory Services Inc. “While the rating does offer insights into fund performance, investors should consider their own goals and tolerances for risk. By combining Morningstar ratings with other research and understanding the fund philosophy, we help our clients make strategic investment choices tailored to their objectives and timelines.”
Navigating Economic Uncertainty
In an environment marked by economic volatility, disciplined investment strategies are crucial for long-term success. While Morningstar ratings offer historical perspective, ongoing monitoring and adjustment of your investment portfolio are essential to ensure it remains aligned with your financial goals.
Economic uncertainty can significantly affect your financial plan, including your retirement timeline. That’s why seeking the guidance of an Investment Advisor from CDSPI Advisory Services Inc. is critical. They have the ability to assess your financial situation, recommend strategies to rebalance your asset allocation and help ensure your portfolio stays on track despite shifting economic conditions.
Investment Planning Advisors from CDSPI Advisory Services Inc. are CERTIFIED FINANCIAL PLANNER® professionals who take the time to understand your unique needs and always provide objective, unbiased advice. Our advisors are paid a salary and are not influenced by any outside affiliations or third-party pressures.
If you have any questions about your Financial Plan or investment strategy, please contact our Investment Advisors at 1.800.561.9401 or investments@cdspi.com. You can also book a meeting online.
*Best seg funds of 2024 leaned on Magnificent 7 | Investment Executive | Catherine Harris